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The Nature Conservancy is working with partners to test,
refine, and implement science-based approaches to influence practices and
support policy changes to help governments achieve energy needs while
protecting rivers and the services they provide to people. To read more about
how we’re working to influence hydropower and river development, download our latest
report, The Power of Rivers: A Business Case. You can also download our executive summary here or below, also available in French and Chinese.

Full Report

Executive Summary

Spanning
nearly a quarter of Colombia’s land area and housing three-quarters of its
population, the Magdalena River basin is in many ways the social, cultural and economic
heart of the country. The basin is responsible for 75 percent of Colombia’s
agricultural production and 86 percent of its GDP, and is home to thousands of
animal species, including more than a hundred fish species that are endemic to
the region.

The
Magdalena basin also generates 70 percent of Colombia’s hydropower, with 35
dams currently operating and nearly 100 sites for potential new hydropower projects
identified. To Colombia, these new projects represent an important source of
low-carbon energy for its growing population, but decisions about where new dams
are developed and how they are operated could have significant economic and
environmental impacts for the river basin and the people and nature that depend
on it.

Map of the Magdalena River Basin (Colombia) with existing and potential hydropower dam sites. Source: Power of Rivers: A Business Case

Balancing Energy and Environment

This
scenario is not unique to Colombia. To maintain the climate within safe
boundaries, the entire world must rapidly decarbonize its energy
systems, including a tripling of generation from low-carbon sources of
electricity. Hydropower is projected to be an important contributor to
this growth, representing nearly US$2 trillion of investment between now
and 2040.

The projected growth of various sources of low-carbon and renewable electricity to meet climate goals. In this projection, total renewable generation would reach just over half of global generation by 2040. Source: Power of Rivers: A Business Case

But this development will also affect sectors
beyond power generation. In river basins across the world, hydropower
development and management will have potential impacts—positive and
negative—on other water resource services that provide an estimated value of up to US$770
billion per year. And by disrupting river connectivity and altering
water flows, hydropower can have significant impacts on freshwater
ecosystems. These disruptions can be especially detrimental for
fisheries, which are a key source of food for hundreds of millions of
people in some of the river basins with the most projected hydropower
development.

Hydropower influenced basins shaded to reflect estimated amount of fish harvest from rivers and their floodplains. Source: Power of Rivers: A Business Case

The amount of under-construction and planned hydropower within each quintile of fish production among hydropower influenced basins (with one being the lowest and five the highest harvest). Source: Power of Rivers: A Business Case

With so much on the line, the expansion of
hydropower must be done right. If planned in isolation—at the scale of
individual projects, or without consideration for objectives beyond
power generation—hydropower projects will generally fail to achieve
their full economic potential and could have negative social and
environmental consequences for more than 300,000 kilometers of rivers
and the communities that depend on them.

Hydropower-Influenced River Basins Worldwide
(click on map for larger version)

This global map of hydropower-influenced river basins provides a detailed snapshot of existing dams (solid dots), dams under construction (gray dots) and planned or potential dams (open circles), with highlighted basins representing case studies in the Power of Rivers: A Business Case report. Source: Power of Rivers: A Business Case

Thinking at the System Scale

Planning
and managing hydropower projects at the system scale—in the context of
the entire river basin—can reduce these negative impacts and ensure that
hydropower dams achieve their full potential contribution to a
country’s strategic objectives for energy and water. Unfortunately,
governments often believe that system-scale planning will result in
implementation delays and projects that are less attractive financially.

This does not have to be the case, though. The Nature
Conservancy has developed a system-scale planning method to identify
options that provide similar levels of generation as business-as-usual
approaches. The result of testing this approach in a variety of river
basins around the world, showed potential improvement ranging from a
modest 5 percent to more than 100 percent for various water-management
services and environmental resources, such as irrigation and fisheries.
We call this process Hydropower by Design.

By
implementing a transparent, stakeholder driven, system-scale approach,
Hydropower by Design can better inform decisions made about water and
energy development and management. Rather than delaying decisions or
investments, these system-level tools and approaches may actually reduce
project-level uncertainty and delay, and thus reduce investment risk.
This approach is described more fully in a new report, The Power of Rivers: A Business Case, developed by The Nature Conservancy in
partnership with McGill University, The University of Manchester and PSR.

Lower Cost, Lower Impact

Hydropower by Design makes it possible to capture the values from optimizing the interaction of water services at the system scale, therefore maximizing benefits for people while minimizing impacts to nature. In effect, this reduces the likelihood of environmental and social impacts and subsequent delays, cost overruns or even cancellations. Hydropower by Design generates sets of development options, or portfolios of projects, that show superior internal rate of return values for projects, given their lower risk for delay. This increase in financial value in turn can “pay for” economic, social or environmental objectives, so countries can afford to be strategic in their planning.

Internal Rate of Return (IRR) Probability Distribution
across potential hydropower projects in the Magdalena Basin, compared
between Business as Usual and Risk Optimization scenarios. Source: Power of Rivers: A Business Case

Hydropower by Design does not represent an entirely new
process—instead, governments and developers can integrate its principles
and tools into existing planning and regulatory processes, ranging from
generation options assessments to basin master plans or strategic
environmental assessments. Colombian government agencies have already
done this, aiming to minimize impacts from future hydropower
development.

The Colombian government’s decision to prioritize
a system-scale approach to hydropower planning and water services
management means a more sustainable future for the Magdalena River basin
and the millions of people who live there. And once again, fortunately,
Colombia is not necessarily alone in this scenario. As the The Power of Rivers: A Business Casedemonstrates, it’s possible to achieve a sustainable future, one
that encourages low-carbon energy and provides broader benefits to
people and minimizes impacts to the environment. That’s a better deal
for everyone.